Exercise 14-5 (Part Level Submission) Selected comparative financial statement d

Question

Exercise 14-5 (Part Level Submission) Selected comparative financial statement data for Bellevue Inc. are shown below BELLEVUE INC. Statement of Financial Position (partial) December 31 (in thousands) 2018 2017 2016 Current assets Cash Held for trading investments Accounts receivable, net Inventory Prepaid expenses $30 90 60 500 574 29 $1,427 $1,311 $1,203 $ 879 $830 750 54 676 626 41 60 580 529 52 Total current assets Total current liabilities Additional information: 2018 2017 2016 (in thousands) Allowance for doubtful accounts $50 $45 $ 40 Net credit sales Cost of goods sold 4,192 3,932 3,718 2,9082,6672,350

Explanation / Answer

Calculation of Working Capital: Working capital= current assets-current liabilities 2018 Working capital= 1427-879=$548 2017 Working capital=1311-830=$481 Calculation of current ratio: Current ratio= current assets/current liabilities 2018 Current ratio=1427/879=1.62 2017 Current ratio=1311/830=1.58 Calculation of Recievables turnover: Recievables turnover= Net sales/ Average account recievables 2018 Average account recievables=(676+580)/2=$628 Recievables turnover= 4192/628=6.7 times 2017 Average accounts recievable= (580+500)/2=$540 Recievable turnover= 3932/540=7.3 times Calculation of collection period: Collection period= 365/recievables turnover 2018 Collection period=365/6.7=54 days 2017 Collection period=365/7.3=50 days Calculation of Inventory turnover: inventory turnover= cost of goods sold/ Average account inventory 2018 Average account inventory=(626+529)/2=577.5 inventory turnover= 2908/577.5=5 times 2017 Average accounts inventory= (529+574)/2=$551.5 inventory turnover= 2667/551.5=4.8 times Calculation of days sale in in inventory: days sale in in inventory= 365/inventory turnover 2018 days sale in in inventory=365/5=73 days 2017 days sale in in inventory=365/4.8=76 days

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